The Global Media Weekly for executives and entrepreneurs

Is Sports Illustrated key to Minute IPO?

Minute Media – the 13-year-old, US-UK-Israel sports digital owner of The Players’ Tribune, FanSided, 90min and STN Video – this week secured a 10-year contract to publish Sports Illustrated (SI) in print and digital. It has an option to extend the licence by a further 20  years. 

Under the deal with SI’s owner, Authentic Brands Group (effectively an intellectual property holdling company which owns the IP rights to Sports Illustrated as well as to celebrities including Marilyn Monroe and Muhammad Ali) said it had signed a long-term deal with Minute Media which also gave it an undisclosed shareholding in the digital company.

The deal comes after a previous license with Arena Group (publisher of TheStreet, Parade and Men’s Journal) was revoked after alleged non-payment of fees. Minute Media said it would continue to publish a print edition of SI and would re-hire some of the employees laid-off by Arena which had announced it would be ending in May.

ABG had acquired the legendary sports brand (formerly published by Time Inc) from Meredith for $110mn in 2019. At the time, Meredith said it would continue publishing SI under licence. But, suddenly, ABG said it had instead sold the rights to Maven (subsequently renamed Arena) for $45mn. You get the sense that nothing about Sports Illustrated has been straightforward since the golden days when it was published weekly alongside Time, Fortune and People.

But this latest deal may offer a vital lifeline for what is, perhaps, the world’s most iconic sports magazine. Asaf Peled, CEO and co-founder of Minute Media, which self-describes as being focused on “short-form sports content creation for mobile”, told the New York Times: “In the current era of digital, it’s still not trivial and quite difficult to build your own brand and get people to know and admire it. So, once you get the opportunity to work with and grow an iconic brand like Sports Illustrated, you take it.”

There are some reasons both to think it could work out wonderfully – or that it might not be a panacea for SI’s longterm problems. But, first, it’s worth looking at SI’s recent history and its continuing ownership structure. 

Minute and Arena are similar-sized media businesses. Arena recorded revenues of $221mn in 2022, while Minute brought in $320mn in 2023. But, while Arena had losses of $70mn in 2022, Minute says it broke-even in 2023. 

Those numbers likely reflect the fact that, while both are operating in a similar, digital advertising environment, Minute is a very different type of company. It has been able continually to raise cash and has become profitable by focussing on digital sports video. Investors have clearly supported the niche focus and it remains to be seen whether publishing Sports Illustrated will prove to be a distraction or whether can it become the flagship that makes the company better known in consumer markets everywhere.

Founded in 2011 as 90min, a football-focused digital outlet which it still owns, Minute has grown into a $1bn plus “unicorn” valuation. In recent years, its been on something of an acquisition spree, picking up Mental Floss from the estate of Felix Dennis in 2018, and buying The Players’ Tribune, which publishes by-lined pieces from elite athletes. Other, more recent acquisitions have been more about its tech stack. In 2020, it bought Voltax Media, a platform for building video engagement that counts the Daily Mail and Barstool Sports among its customers. And, just weeks before the SI deal was unveiled, it announced its biggest-ever acquisition: it paid $150mn for content distributor STN Video which, among other things, includes video rights to most American league sports. That deal was accompanied – and part-funded by – a new $100mn of debt and equity from HSBC Innovation Banking and funds managed by BlackRock. They valued the company at $1bn. 

The core idea behind Minute Media is that it marries professional output with closely curated fan content, all tied into tech that includes content creation tools and a supply-side advertising platform. Back in 2019, Asaf Peled said: “If you give sports fans the technology, they create the best content – and mostly for free.” 

And this is where we can weigh up the pros and cons for the company taking on SI. Minute Media is a growing force in exactly the area that SI once dominated. SI, meanwhile, remains a prestige brand that gives Minute a big calling card and lots of weight among big brand advertisers – and even among legacy media. Minute has the resources to grow SI – and a ready-made distribution and advertising network to make the most of its output. But the decline in SI’s subscriptions from 1.6mn to 1.2mn during 2022-23 shows how the brand has suffered in recent times, let alone in the five years since it had 2.75mn subscribers.

However, the thing SI is famous for (apart from its swimwear edition) is high-quality written and photo journalism. That is, frankly, not the core focus of Minute. Fan-created content and programmatic advertising are, arguably, a big reason why brands like SI have struggled; as a business model, they pull in a very different direction. Even the most prestigious brand in Minute’s current portfolio, The Players Tribune, is effectively a high-end version of user generated content.

Ultimately, Minute is much more a numbers-driven tech company than a content creator. Does it really fit with Sports Illustrated?

Minute is said to be profitable with some $300mn of revenue, having raised a total of more than $250mn from strategic and private investors including betting company FanDuel and casino firm Wynn. But, to emphasise the troubling context for a company founded in Israel, Axios recently reported that about one-third of Minute Media’s 500 employees are based in Tel Aviv and that many are on active military duty.

Our hunch is that the SI publishing deal is designed to sweeten the pot for a future IPO of Minute Media, something it first explored at a valuation in excess of $1bn back in 2021. That suggests that, for the immediate future, keeping SI healthy and giving it the resources it needs to thrive, will be a priority.

Whether retaining stewardship of a premium content brand remains compatible with the rest of the audience-driven business long-term, is another matter entirely. But the August 2024 timing of the 70th anniversary of Sports Illustrated may just be a convenient springboard to IPO.